Chapter01TheChangingRoleofManagerialAccountinginaDynamicBusinessEnvironment

Chapter 01 The Changing Role of Managerial Accounting in a Dynamic Business EnvironmentYou can buy the complete file from /testbankexpress4Chapter 01The Changing Role of Managerial Accounting in a Dynamic Business Environment ? True / False Questions ?1.?Controlling involves the coordination of daily business functions within an organization.?True?False?2.?Measuring the performance of managers and subunits is not an objective of managerial accounting.?True?False?3.?Middle-level managers would likely be considered internal users of accounting information rather than external users.?True?False?4.?A controller is normally involved with preparing financial statements.?True?False?5.?The upper limit on the production of goods and services if everything works perfectly is known as practical capacity.?True?False? Multiple Choice Questions ?6.?Which of the following statements about managerial accountants is false?A.?Managerial accountants more and more are considered ;business partners.;B.?Managerial accountants often are part of cross-functional teams.C.?An increasing number of organizations are segregating managerial accountants in separate managerial-accounting departments.D.?In a number of companies, managerial accountants make significant business decisions and resolve operating problems.E.?The role of managerial accountants has changed considerably over the past decade.?7.?The day-to-day work of management teams will typically comprise all of the following activities except:?A.?decision making.B.?planning.C.?cost minimizing.D.?directing operational activities.E.?controlling.?8.?Which of the following functions is best described as choosing among available alternatives?A.?Decision making.B.?Planning.C.?Directing operational activities.D.?Controlling.E.?Budgeting.?9.?Which of the following managerial functions involves a detailed financial and operational description of anticipated operations?A.?Decision making.B.?Planning.C.?Directing operational activities.D.?Controlling.E.?Measuring.?10.?Which of the following involves the coordination of daily business functions within an organization?A.?Decision making.B.?Planning.C.?Directing operational activities.D.?Controlling.E.?Motivating.?11.?Taurus Company has set various goals, and management is now taking appropriate action to ensure that the firm achieves these goals. One such action is to reduce outlays for overhead, which have exceeded budgeted amounts. Which of the following functions best describes this process?A.?Decision making.B.?Planning.C.?Coordinating.D.?Controlling.E.?Organizing.?12.?Which of the following is not an objective of managerial accounting?A.?Providing information for decision making and planning.B.?Assisting in directing and controlling operations.C.?Maximizing profits and minimizing costs.D.?Measuring the performance of managers and subunits.E.?Motivating managers toward the organization's goals.?13.?The role of managerial accounting information in assisting management is a(n):?A.?financial-directing role.B.?attention-directing role.C.?planning and controlling role.D.?organizational role.E.?problem-solving role.?14.?Employee empowerment involves encouraging and authorizing workers to take initiatives to:?A.?improve operations.B.?reduce costs.C.?improve product quality.D.?improve customer service.E.?All of these.?15.?The process of encouraging and authorizing workers to take appropriate initiatives to improve the overall firm is commonly known as:?A.?planning and control.B.?employee empowerment.C.?personnel aggressiveness.D.?decision making.E.?problem recognition and solution.?16.?Which of the following business models considers financial, customer, internal operating, and other measures in the evaluation of performance?A.?Deterministic simulation.B.?Balanced scorecard.C.?Payoff matrix.D.?Decision tree.E.?Chart of operating performance (COP).?17.?Which of the following perspectives is normally absent in a balanced scorecard?A.?Financial.B.?Customer.C.?Internal operations.D.?Learning and innovation/growth.E.?None of these.?18.?Managerial accounting:?A.?focuses only on historical data.B.?is governed by GAAP.C.?focuses primarily on the needs of personnel within the organization.D.?provides information for parties external to the organization.E.?focuses on financial statements and other financial reports.?19.?Managerial accounting:?A.?is unregulated.B.?produces information that is useful only for manufacturing organizations.C.?is based exclusively on historical data.D.?is regulated by the Securities and Exchange Commission (SEC).E.?generally focuses on reporting information about the enterprise in its entirety rather than by subunits.?20.?All of the following entities would have a need for managerial accounting information except:?A.?the state of Michigan.B.?Google.C.?Abercrombie & Fitch.D.?H&R Block.E.?None of these responses is correct, as all of these entities would use managerial accounting information.?21.?Which of the following choices correctly depicts whether McDonald's, the University of Wisconsin, and Apple Inc. would have a need for managerial accounting?A.?Choice AB.?Choice BC.?Choice CD.?Choice DE.?Choice E?22.?Which of the following would likely be considered an internal user of accounting information rather than an external user?A.?Stockholders.B.?Consumer groups.C.?Lenders.D.?Middle-level managers.E.?Government agencies.?23.?Financial accounting focuses primarily on reporting:?A.?to parties outside of an organization.B.?to parties within an organization.C.?to an organization's board of directors.D.?to financial institutions.E.?for financial institutions.?24.?Which of the following characteristic(s) relate(s) more to managerial accounting than to financial accounting?A.?A focus on reporting to personnel within an organization.B.?A focus on reporting to external parties.C.?An area of accounting that is heavily regulated.D.?A focus on providing information that is relevant for planning, decision making, directing, and control.E.?Choices ;A; and ;D; above.?25.?Which of the following statements represents a similarity between financial and managerial accounting?A.?Both are useful in providing information for external users.B.?Both are governed by GAAP.C.?Both draw upon data from an organization's accounting system.D.?Both rely heavily on published financial statements.E.?Both are solely concerned with historical transactions.?26.?Which of the following employees at Delta Airlines would not be considered as holding a line position?A.?Pilot.B.?Chief financial officer (CFO).C.?Flight attendant.D.?Ticket agent.E.?Baggage handler.?27.?Which of the following employees would be considered as holding a line position?A.?Exxon Corporation's vice-president for government relations.B.?The controller of General Motors.C.?A secretary employed by Verizon Communications.D.?The manager of food and beverage services at Disney's Magic Kingdom.E.?None of these.?28.?Which of the following employees at Starbucks would likely be considered as holding a staff position?A.?The company's chief operating officer (COO).B.?The manager of a store located in Kansas City, Missouri.C.?The company's lead, in-house attorney.D.?The company's chief financial officer (CFO).E.?Choices ;C; and ;D; above.?29.?The chief managerial and financial accountant of an organization is the:?A.?chief executive officer (CEO).B.?treasurer.C.?vice-president of accounting.D.?internal auditor.E.?chief financial officer (CFO).?30.?Which of the following typically does not relate to the role of a controller?A.?A controller supervises the accounting department.B.?A controller safeguards an organization's assets.C.?A controller oversees the preparation of reports required by governmental authorities.D.?A controller normally assumes a narrow role within the organization, often preventing the individual's rise to top management ranks.E.?Choices ;B; and ;D; above.?31.?A controller is normally involved with:?A.?preparing financial statements.B.?managing investments.C.?raising capital.D.?safeguarding assets.E.?managing the firm's credit policy.?32.?Which of the following is not a function of the treasurer?A.?Safeguarding assets.B.?Managing investments.C.?Preparing financial statements.D.?Being responsible for an entity's credit policy.E.?Raising capital.?33.?Managerial accountants:?A.?often work on cross-functional teams.B.?are located throughout an organization.C.?are found primarily at lower levels of the organizational hierarchy.D.?are found primarily at higher levels of the organizational hierarchy.E.?choices ;A; and ;B; above.?34.?The two dimensions of managerial accounting are:?A.?a decision-facilitating dimension and a decision-influencing dimension.B.?a decision-facilitating dimension and a financial-influencing dimension.C.?a decision-influencing dimension and a cost-minimizing dimension.D.?a cost-minimizing dimension and a profit-maximizing dimension.E.?a decision-influencing dimension and a profit-maximizing dimension.?35.?Much of managerial accounting information is based on:?A.?a cost-benefit theme.B.?profit maximization.C.?cost minimization.D.?the generation of external information.E.?effectiveness but not efficiency.?36.?Which of the following is not normally considered to be an element of e-business?A.?E-budgeting.B.?Supply-chain management.C.?E-commerce.D.?Balanced scorecards.E.?Choices ;B; and ;D; above.?37.?Managerial accounting has changed in recent years because of:?A.?the growth of e-business.B.?increased global competition.C.?the emergence of new industries.D.?an increased focus on the customer.E.?All of these factors.?38.?Managerial accounting has changed in recent years because of:?A.?a growing service economy in the United States.B.?the growing popularity of cross-functional teams.C.?an increase in global competition.D.?time-based competition.E.?All of these factors.?39.?Which of the following statement(s) about just-in-time (JIT) inventory management is (are) true? I. The emphasis of JIT is on ;pull; manufacturing.II. Raw materials are purchased just in time to be used in production.III. JIT is an inventory technique that focuses on reduction of both inventory and related inventory costs.?A.?I only.B.?II only.C.?III only.D.?II and III.E.?I, II, and III.?40.?Idaho Corporation recently implemented a just-in-time (JIT) production system along with a series of continuous improvement programs. If the firm is now considering adopting a total quality management (TQM) program, it would likely find that TQM:?A.?is consistent with both JIT and continuous improvement.B.?is consistent with JIT but inconsistent with continuous improvement.C.?is consistent with continuous improvement but inconsistent with JIT.D.?is inconsistent with both JIT and continuous improvement.E.?is an antiquated management technique.?41.?Kaizen costing is consistent with:?A.?cost reduction.B.?continuous improvement.C.?poor quality.D.?financial accounting and income statements.E.?both choices ;A; and ;B; above.?42.?Cost management systems tend to focus on an organization's:?A.?machines.B.?employees.C.?activities.D.?customers.E.?rules and regulations.?43.?The upper limit on the production of goods and services if everything works perfectly is known as:?A.?practical capacity.B.?theoretical capacity.C.?utilized capacity.D.?management capacity.E.?capacity maximization.?44.?The capacity concept that allows for normal occurrences such as machine downtime and employee fatigue is known as:?A.?practical capacity.B.?theoretical capacity.C.?utilized capacity.D.?management capacity.E.?capacity maximization.?45.?The cost of resources supplied but unused is known as:?A.?practical capacity costs.B.?the cost of theoretical capacity.C.?the cost of unused capacity.D.?the cost of resources supplied.E.?capacity cost.?46.?Given the following information, what is the cost of unused capacity? Cost of material supplied is $3,200; Cost of material used is $3,000; Cost of material used per cake is $3; Cost of material supplied per cake is $3.20.?A.?$0.20.B.?$200.C.?$2,000.D.?$1,000.E.?There is no unused capacity.?47.?Given the following information, what is the cost of unused capacity? Cost of material supplied is $8,600; Cost of material used is $8,000; Cost of material used per shelf is $8; Cost of material supplied per shelf is $8.60.?A.?$600.B.?$6,000.C.?$0.60.D.?$1,000.E.?There is no unused capacity.?48.?The value chain of a manufacturer would tend to include activities related to:?A.?manufacturing.B.?research and development.C.?product design.D.?marketing.E.?All of these.?49.?Which of the following choices correctly depicts activities that would be included in a manufacturer's value chain?A.?Choice AB.?Choice BC.?Choice CD.?Choice DE.?Choice E?50.?Which of the preceding activities would likely not be considered part of The Gap clothing company's value chain?A.?Designing a new product line.B.?Locating and then negotiating terms with a clothing manufacturer.C.?Marketing an existing product line.D.?Distributing goods from regional warehouses to local stores.E.?All of these activities would be an element in the company's value chain.?51.?The activities performed by a manufacturing organization could be categorized as pre-production (such as research and development and product design), production-related, and post-production (such as marketing and customer service). Which activities should the firm focus on if management understands the value chain concept and desires to meet organizational goals?A.?Pre-production activities.B.?Production-related activities.C.?Post-production activities.D.?Choices ;A;, ;B;, and ;C; above.E.?Choices ;A; and ;B; above.?52.?In order for a company to achieve a sustainable competitive advantage, it must perform value chain activities:?A.?at the same quality level as competitors, at the same cost.B.?at the same quality level as competitors, but at a lower cost.C.?at a higher quality level than competitors, at a higher cost.D.?at a higher quality level than competitors, but at no greater cost.E.?Either choice ;B; or ;D; above.?53.?The process of managing the various activities in the value chain, along with the associated costs, is commonly known as:?A.?activity-based costing.B.?strategic cost management.C.?total quality management.D.?computer-integrated costing.E.?sound management practices (SMP).?54.?A company has a bottleneck operation that slows production. Which of the following tools or approaches could the firm use to determine the most cost-effective ways to eliminate this problem?A.?Linear programming.B.?Theory of constraints.C.?Decision-tree diagrams.D.?Payoff matrices.E.?Strategic path analysis (SPA).?55.?Which of the following can be linked to a wave of corporate scandals that took place not too long ago?A.?Greedy corporate executives.B.?Managers who made over-reaching business deals.C.?Lack of oversight by companies' audit boards and boards of directors.D.?Shoddy work by external auditors.E.?All of these.?56.?Which of the following acts strives to improve corporate governance and the quality of corporate accounting/reporting?A.?Robinson-Patman.B.?Taft-Hartley.C.?Sarbanes-Oxley.D.?Bush-Cheney.E.?Franks-Ashcroft.?57.?Which of the following statements about the ethical climate of business is false?A.?Greedy corporate executives are, in part, to blame for the rash of corporate scandals that occurred not too long ago.B.?Unethical business behavior can have a negative impact on our economy.C.?The Sarbanes-Oxley Act strives to improve the overall quality of corporate reporting.D.?The Robinson-Patman Act strives to improve the overall quality of corporate reporting.E.?Corporate scandals have served as the accounting profession's wake-up call to pay increased attention to ethical issues in the conduct of business.?58.?Which of the following is not an ethical standard of managerial accounting?A.?Competence.B.?Confidentiality.C.?Efficiency.D.?Integrity.E.?Credibility.?59.?Which of the following is not an element of competency?A.?To develop appropriate knowledge about a particular subject.B.?To perform duties in accordance with relevant laws.C.?To perform duties in accordance with relevant technical standards.D.?To refrain from engaging in an activity that would discredit the accounting profession.E.?To prepare clear reports after an analysis of relevant and reliable information.?60.?Assume that a managerial accountant regularly communicates with business associates to avoid conflicts of interest and advises relevant parties of potential conflicts. In so doing, the accountant will have applied the ethical standard of:?A.?objectivity.B.?confidentiality.C.?integrity.D.?credibility.E.?unified behavior.? Essay Questions ?61.?Present several examples of managerial accounting information that could help a manager make each of the following decisions:A. A manufacturing company is currently making a part that is a production headache. The firm is deciding whether to abandon production and buy the part from an outside supplier.B. An operator of fast-food restaurants is deciding whether to open a new store in Dallas.?62.?Borders Overnight operates an overnight package delivery service that competes with Federal Express and United Parcel Service (UPS). Top management is considering the use of a balanced scorecard to evaluate operations.A. What is a balanced scorecard and other than customer-satisfaction measures, what are its typical key components?B. List four customer-satisfaction measures that Borders might use to evaluate performance.?63.?Consider the descriptors that follow.1. Is heavily involved with the recordkeeping and reporting of assets, liabilities, and stockholders' equity.2. Focuses on planning, decision making, directing, and control.3. Is heavily regulated.4. A field that is becoming more ;cross-functional; in nature.5. Much of the field is based on costs and benefits.6. Is involved almost exclusively with past transactions and events.7. Much of the information provided is directed toward stockholders, financial analysts, creditors, and other external parties.8. Tends to focus more on subunits within an entity rather than the organization as a whole.9. May become involved with measures of customer satisfaction, and the amount of actual cost incurred vs. budgeted targets.Required:Determine whether the descriptors are most closely associated with financial accounting or managerial accounting.?64.?DreamWorks Pictures produces both motion pictures for theaters as well as a variety of television series. Consider the seven activities that follow.1. Auditions for actors and actresses2. Development of promotional materials for use by local newspapers3. Focus groups to evaluate ideas for potential television comedy series4. Production of DVDs for release to Best Buy and Blockbuster Video5. On-location shooting of scenes6. Fine-tuning and rewrites of scripts7. Set design and construction for a new medical dramaRequired:A. Evaluate the seven activities as upstream (pre-production), production, or downstream (post-production) in nature.B. Generally speaking, which activities (upstream, production, or downstream), if any, can management ignore if the company is to be successful in achieving its key strategic goals?65.?Tae Franklin is the sales manager of Darius Enterprises, a very profitable distributor of office furniture to local businesses. A recent economic downturn has created an extremely tight cash position, and the company has been hurt by